Abigail MacIver: Robbing Peter to pay Paul

According to many of Florida’s decision-makers and aspiring political leaders, understanding the state’s energy market is as a simple as looking at the state’s nickname — the Sunshine State.

Many individuals maintain that the laws regarding how we collect sunlight are sure to foster greater competition and better choices for energy consumers overall.

Democratic gubernatorial candidate Charlie Crist, for example, has specifically advocated for more solar power subsidies as a part of his overall effort to tout renewable energy.

However, reality reveals just how misleading it is to claim that expanding solar subsidies enhances choice or competition. The solar industry and its advocates are, in actuality, seeking favored status within the current monopoly system — at the expense of nonsolar customers. This is hardly competition at all.

Since the advent of solar technology, roof-top solar systems have been relatively expensive. A wide array of state and federal tax incentives were created to encourage consumers to use roof-top solar.

Despite falling prices, without generous subsidies roof-top solar is still not competitive with other methods of generating electricity.

The subsidies currently permitted in Florida are some of the most egregious nationwide, leading to intensely unfair and distorted costs and pricing schemes. Artificially underpinning the solar market has created a scenario in which roof-top solar users benefit at the expense of taxpayers and consumers who don’t or can’t own solar.

The framework in Florida, as with several other states, allows homeowners to install roof-top solar through the help of a generous 30-percent federal tax credit and other local incentives. Once in use, utility companies are required to buy back the excess power generated at full retail price under a policy known as “net metering.” This allows roof-top solar users to have all of the benefits of traditional electrical generation, and the grid that distributes electricity, without helping to pay for the costs associated with keeping the lights on.

Yes, it’s nice if your electric bill is $0, but those without solar are left to pay for the maintenance of the electrical grids on their own. Further compounding the inherent inequity is the fact that most consumers can’t afford solar and are consequently locked out of the handouts.

A California Public Utility Commission study found that rooftop-solar households have average incomes of over $91,000, compared with approximately $54,000 for other customers. A government-supported subsidy scheme in which middle- and lower-income consumers bear the brunt of electrical grid maintenance costs is greatly unsettling and should be of concern to all of us.

It gets worse. In an attempt to take full advantage of government subsidies, the Florida solar industry has created a business model completely dependent on these federal tax dollars. Under these schemes, consumers sign a long-term lease with a solar company in exchange for giving up their federal and local tax subsidies. Consumers are then locked into a payment system that neglects to adjust to market conditions, even as the costs related to solar might decline.

Contracts can become further deceptive as the third-party leasing companies have every incentive to inflate the cost of the system to get a larger tax break. One company in California, for example, was found to have been leasing systems at a cost of 50 percent more than market prices.

This is what happens when the government meddles in markets. It’s clear that Florida needs to step back from this expensive, unjustifiably unfair runaway solar subsidy train. The Sunshine State needs and deserves a mix of affordable energy sources that aren’t taxpayer-subsidized in the name of propping up so called “competition” or “choice.”

Abigail MacIver is the deputy state director of Americans for Prosperity — Florida (http://americansforprosperity.org/florida).